In its original meaning, a physical coming together of a sizable number of merchants and prospective customers at a pre-arranged time and place (in medieval Europe, typically once a week on the main square of the largest village in the vicinity) for the purpose of striking deals to buy and sell a variety of goods and services. Large numbers of customers came to such organized markets because they found it convenient to be able to make many of their necessary purchases on the same day in one central location (minimizing their total travel time and other travel costs) and because the presence of many merchants offering similar wares made it much more practical to comparison shop for the best deals in terms of quality and price. Merchants were often attracted from considerable distances to participate in such markets because of the opportunity to sell so many of their wares to such large numbers of potential customers in such a short time. Modern day flea markets, farmers' markets, gun shows and crafts fairs are fairly close to the original concept.

In the language of modern industrial society, and especially in the language of professional economists, the concept of a market has been generalized and abstracted far beyond the original rather concrete and localized meaning of the term. In the more modern sense of the term, a market is the generalized name tag for the whole process that gets under way whenever a sizable number of people free to buy and/or sell a particular kind of good or service are in more or less close communication with each other (either personally and directly or else through the mediation of advertising, catalogs, news reports, postal carriers, telephone systems, computer networks, etc.) so that information about the terms of recent transactions and current offers to buy or sell is generally available to a large number of interested parties at relatively low cost -- regardless of the participants' physical proximity or distance. Such technological innovations of the industrial age as ever cheaper and more rapid transportation and communications over increasing distances both have dramatically increased the size of the areas from which buyers and sellers may be brought together to do business and have greatly reduced the need for them actually to meet face-to-face in one place in order to strike a bargain. The markets for many consumers' durable goods like automobiles or TVs and major agricultural and industrial commodities like oil, natural gas, wheat, beef, steel, forest products and computer chips are now literally world-wide in extent. (Of course, for many markets there do still exist central gathering places or locations that play an especially important role in the local, national or even worldwide networks of buyers and sellers -- for example, the New York Stock Exchange, the Chicago Commodities Exchange, the seasonal women's fashions shows in Paris and Milan, regional baseball card collectors conventions and so on -- but in nearly all such cases, it is not really necessary for an individual buyer or seller actually to travel to the relevant marketplace in order to participate in the broader markets of which these are nowadays only a part.)

Where markets exist and are allowed to function reasonably freely, there are certain predictable consequences for the way the economy will operate. Elaboration of these consequences is the primary purpose of most of the research in the theoretical subfield of microeconomics.

[See also: market economy, capitalism, property rights, contract, microeconomics, transaction costs, competition]